From: lessgovt@gmail.com   
      
   Argentina Is a Day Late and a Dollar Short   
   By Readers, Aug. 11, 2023, WSJ   
      
   In “Groundhog Day for Deadbeat Argentina” (Americas, Aug. 7), Mary   
   Anastasia O’Grady points to the main problem afflicting the South American   
   country: inflation. She also explains how, in a vicious cycle, profligate   
   governments bring about a    
   collapse in the national currency. We are somewhat more optimistic, however,   
   since there is a proven solution at hand.   
      
   Dollarization, which entails replacing the local currency with a foreign one,   
   is a time-tested way to tame inflation. By preventing the local political   
   class from carrying out any monetary policy, dollarization is, the economist   
   Steve Hanke argues, “   
   equivalent to instituting the rule of law in the monetary sphere.” Further,   
   dollarization brings lower interest rates, longer loan periods and an   
   intrinsic budget constraint on the government, which loses its ability to   
   monetize its debt.   
      
   In Argentina’s case, dollarization also would defuse the country’s ticking   
   fiscal time bomb, the $30 billion liability in short-term liquidity notes. In   
   Ecuador, adopting the dollar in January 2000 helped to restructure debts and   
   reduce the burden of    
   fiscal liabilities.   
      
   Since then, Ecuadoreans have elected left-wing, fiscally extravagant   
   governments. Due to dollarization, however, their purchasing power has   
   remained stable and their savings are no longer subject to recurrent wipeouts.   
   Argentines, on the other hand,    
   still suffer under a free-falling peso that has lost 65.9% of its purchasing   
   power this year alone.   
      
   While dollarization can’t solve all of Argentina’s economic problems, it   
   does provide a sound currency, which makes it easier for people to save,   
   invest and generate prolonged economic growth. As the low inflation rates of   
   Ecuador, Panama and El    
   Salvador demonstrate, if you prevent the local ruling class from printing   
   money indiscriminately, positive results begin to emerge.   
   ---Gabriela Calderón de Burgos and Daniel Raisbeck, Cato Institute,   
   Guayaquil, Ecuador, and Washington   
      
   https://www.wsj.com/articles/argentina-usd-dollar-currency-monet   
   ry-inflation-debt-38db560   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)